|By Orathai Sriring

|By Orathai Sriring

|By Orathai Sriring

|By Orathai Sriring

|By Orathai Sriring

|By Orathai Sriring

BANGKOK (Reuters) - Nearly two years after Thailand's junta approved $40 billion for big transport projects to spur economic revival, it has spent barely two percent of that, official figures show.

The first of the 20 projects in the junta's big transport spending plan was approved in May 2015. By late January only 26.6 billion baht ($760 million) had been spent on them, documents from ministries showed.

Projects are being held up by unforeseen delays for feasibility studies, bidding, procurement and changes to key officials, officials say.

Most projects exist only on paper, the documents seen by Reuters show.

"The only problem is government regulations, which make people afraid of doing anything as they have to be careful and make everything right," Finance Minister Apisak Tantivorawong told reporters last week.

"But much of the problem has been fixed, with several projects now in the process. So delayed projects from last year will be on time this year," he said.

The slow start reflects the government's broader challenge in meeting investment promises to lift Southeast Asia's second- largest economy, for which tourism has been the only bright spot since a 2014 military coup.

Thailand's growth - 3.2 percent last year - has lagged Southeast Asian counterparts since the coup and growth was again below forecast in the last quarter. [nL4N1G22X8]

Total government investment spending reached a record 365 billion baht ($10.4 billion) in the last fiscal year ending Sept. 30. But as a proportion of the government's target, it fell further short than in any year for a decade except for the 2014 crisis year.(See graphic http://reut.rs/2ndfbWr)

OFF THE RAILS

For an example of what can go wrong, look at the railways.

After months of delays to vet contenders to bid for five double-track railway projects worth over 100 billion baht ($2.9 billion), the governor and board of the state railway company were replaced by military decree last month.

The change, following complaints of a lack of transparency, should speed up the work, said government spokesman Lieutenant General Sansern Kaewkamnerd.

"This will enable government projects to go ahead," he said.

But it meant that bidding on the projects was immediately suspended.

Trying to kick-start investment, the junta has now set up a new committee to oversee all projects worth over 5 billion baht.

"We want large projects to get going as quickly as possible," Deputy Prime Minister Somkid Jatusripitak told reporters at Government House.

Finance Minister Apisak said disbursement for all infrastructure projects would triple this year to 240 billion baht, with two-thirds of that for the big transport projects. Doing that could help growth outpace the ministry's 3.6 percent growth target, he said.

"There's a high degree of assurance that these projects will be executed. That's another push to the economy," he said.

CONSTRUCTION STOCKS BOOM AGAIN

The stock market seems to believe that.

Companies in the construction materials index <.SETCO>, those with the most to gain, outperformed the broader stock exchange index <.SETI> by more than 22 percentage points in 2015, the year the transport infrastructure plan was announced. But last year they lagged by more than 18 points, when little happened.

Reflecting some of the optimism that the projects will now get started, the index is up over 7 percent year to date.

Construction firm CH Karnchang <CK.BK> said it expected to secure public work of over 50 billion baht in the first half of 2017, while it had a current backlog of public construction work worth about 89 billion baht.

"The company is confident that the government will push ahead useful projects," Executive Board Chairman Plew Trivisvavet said.

Top producer Siam Cement <SCC.BK> has, however, predicted demand would rise only 1-3 percent this year after a 2 percent fall in 2016, with infrastructure projects only kicking in towards the end of the year.

With little investment over the past decade, Thailand's ranking for transport infrastructure on the World Economic Forum's Global Competitiveness Index fell to 37th place in 2016-17 from 23rd place in 2010. Indonesia climbed to 36th from 63rd.